Non-Market Goods
Most
environmental goods, such as clean air and water, and healthy fish and wildlife
populations, are not traded in
markets. Their economic value - how much people would be willing to pay for
them in dollars is not revealed in
market prices. The only option for assigning dollar values to them is to rely
on non-market valuation
methods.
Non-Rival Goods
One person's
consumption of most goods (apples or housing) reduces the amount available for
everyone else. Environmental
goods are different. Clean water and air, beautiful views, and to some extent
outdoor recreation, can
be enjoyed by everyone in the same way as radio and television. The economic
value of non-rival or public
goods is the sum of all people's willingness to pay.
Non-exclusive Goods
People cannot be
excluded from enjoying most environmental goods and the cost of trying to
exclude them is prohibitive.
Other than increases in onsite hunting and fishing opportunities, which may be
a source of economic benefit
to farmers, the environmental benefits of most conservation practices are
non-exclusive. The free rider
problem makes it impractical for farmers to recoup the cost of on-farm
conservation investments from
those who benefit from off-farm environmental improvements.
Inseparable Goods
Conservation
practices at a given site contribute in many roundabout ways to environmental
goods and result in environmental
and economic benefits that accrue over great distances in time and space. It
may be impossible to
separate the economic benefits that result from one conservation practice
undertaken at one site from another
undertaken at another site. Worse, it may be impossible to separate the
aggregate benefits of those practices
from those of other environmental investments.